Central government administration, Roads & highways, Law and justice and public administration; Transportation

Cofinancing (US $M)

L/C Number:

C2857

Board Approval (FY)

97

Partners involved

Closing Date

12/31/2001

12/31/2003

Prepared by:

Reviewed by:

Group Manager:

Group:

Peter Nigel Freeman

John R. Heath

Alain A. Barbu

OEDST

2. Project Objectives and Components:

a. Objectives

There were four objectives:
i) To develop government capacity to maintain regularly the whole classified road network by the year 2000 and upgrade priority roads to improved serviceability standards;

ii) To improve access to isolated areas and basic services in district centers by facilitating road traffic and lowering transport costs;iii) To develop further the emerging private local road construction and maintenance industry, using mainly labor-based methods; iv) To strengthen the planning, implementation and management capacity of the road sector agencies through policy and institutional reforms and capacity building.

b. Components

Civil Works Program (84 percent of costs). a) Gradual implementation of routine maintenance on the whole classified network and periodic maintenance on all sections in good or poor condition; b) Rehabilitation of gravel road sections in poor condition that have deteriorated past the point of maintenance to as-built, maintainable standards and rehabilitation of priority trunk road sections; c) Upgrading key selected rural earth and gravel roads to all-weather standards and four important trunk road sections from gravel to paved standards.
Design, engineering and supervision (4 percent of costs). Feasibility studies, detailed design, bridge assessment, supervision and studies for urban roads;Sector institutional reform and capacity building (12 percent of costs). a) Support for implementing institutional reform to assist the Government of Lesotho (GOL) in implementing key regulatory and policy reforms, including restructuring the Ministry of Works and establishing sustainable road financing mechanisms to enable full government funding of maintenance and rehabilitation; b) Establishment and development of capacity of main and rural road agencies; logistical support to the Roads Branch (RB) and Labor Construction Unit.

c. Comments on Project Cost, Financing and Dates

Due to slow initial progress the project was restructured at Mid Term Review and US$17.1million cancelled from the Credit in October, 2000. At project closure 95 percent of the remaining Credit had been utilized.

3. Achievement of Relevant Objectives:

To develop government capacity to maintain regularly the whole classified road network.....Partially achieved. Good progress has been made in developing private sector capacity to assist GOL. Supervision capacity has also improved. However, capacity constraints are still evident in government (qualified Basutos are lost to South Africa where salary rates are higher) and there are still insufficient funds to fully maintain the network.
To improve access to isolated areas....Achieved. An impact assessment study found that local residents rated highly the improved access and labor opportunities provided by the contracts. The length of road benefitting from routine maintenance was 20 percent higher than planned, while rehabilitation and upgrading targets were largely accomplished.To develop further the emerging private local road construction and maintenance industry....Achieved. 65 small contractors in maintenance and rehabilitation and 10 contractors in construction and upgrading have been trained; training materials have been developed and are being utilized.To strengthen the planning, implementation and management capacity of the road sector agencies....Partially achieved. Staff training has been undertaken, an institutional reform study completed and recommendations drawn up. However, at project closure the National Roads Authority had not been established.

4. Significant Outcomes/Impacts:

The use of force account labor for maintenance has been phased out.

Logistical support was successfully provided to the RB and Dept of Rural Roads including equipment and computers.

There is a 30-40 percent shortfall in funds accruing to the Road Fund to carry out routine and periodic maintenance. The issue that low traffic volumes and an extensive road network make it difficult to mobilize adequate user fees is not yet fully resolved.

The concept of financing through user fees has also not been fully achieved in accordance with the GOL Letter of Sector Policy.

The Road Fund Board has functioned erratically and members have served short terms. Money intended for routine maintenance has apparently been allocated to Maseru roads upgrading and street lighting.

The statement made by Development Cooperation Ireland (who provided parallel financing) that excessive design standards for low volume roads is a key issue, is unchallenged in the ICR.

The capacity in GOL has been strengthened, but still remains a serious constraint.

6. Ratings:

ICR

OED Review

Reason for Disagreement/Comments

Outcome:

Satisfactory

Moderately Satisfactory

OED rates a project as moderately satisfactory (a rating which does not exist under the ICR's 4-point scale) when it achieves most of its major relevant objectives, but with significant shortcomings. The shortcomings are noted under section 5.

Institutional Dev.:

Modest

Modest

Sustainability:

Likely

Non-evaluable

There are many Road Funds in Africa which are not functioning as intended. Although there are good intentions in this case some fundamental problems have still to be resolved. At credit closure the Road Authority had still not been established.

The time needed to achieve institutional reform in a context of limited capacity should be assessed realistically.

Privatizing road maintenance is an important step towards achieving sustainability in the road sector.

8. Audit Recommended? Yes

Why? Four previous World Bank assisted projects in Lesotho have focused on road maintenance, but maintenance has continued to be poor due to inadequate funding and limited institutional capacity. The difference with this project is the creation of a Road Fund and a separate Road Authority. However, the ability of the Road Fund to meet the criteria for success and the effectiveness of the proposed new authority are still open questions. The apparently successful process of moving from force account to private sector maintenance and further examination of the impact on the rural communities also deserve further attention.

9. Comments on Quality of ICR:

The ICR is somewhat optimistic in its ratings, based more on hope than fact at this stage. However, it is generally well-presented and complies with ICR guidelines. More information could have been provided about rural and poverty impacts which are dealt with somewhat superficially.